Resolving disputes out of court – how does it work?

Alternative Dispute Resolution (ADR) is a process by which disputes can be resolved without involving traditional adversarial methods, such as court trials and hearings. It is controlled by an impartial person, such as a mediator, who helps settle the dispute.

ADR addresses the high cost and delayed nature of legal proceedings by providing an informal, flexible and consensual method of dispute resolution, thereby creating a timelier and more cost effective process. Other than saving time and money, ADR also has the advantage of providing a less hostile forum, where relationships can still be maintained after the dispute process.

There are three types of ADR processes: Determinative, Advisory and Facilitative.

Determinative Processes

This is where a third party hears arguments and evidence of the dispute and then makes a decision.These include:

Arbitration – Participants present their case to an arbitrator (chosen by the parties) who makes a determination. These determinations normally result in a binding contract. This is one of the more formal types of ADR, with parties often represented by solicitors.

Expert Determination – Participants present their case to an independent expert who makes a determination on some disputed facts or issues.

Private Judging – Participants present their case to a Judge (normally retired) who makes a decision based on their opinion if the matter were to go to court.

Fact Finding – Participants present their case to a practitioner who gives an opinion as to the facts in dispute, but does not make any recommendations or decisions as to the outcome of the matter.

Facilitative Processes

In facilitative processes, the parties are assisted by a third party to identify the issues in dispute, develop solutions and reach an agreement. These processes include:

Negotiation – Participants use representatives who act on behalf of the parties. The representatives identify issues and attempt to negotiate an agreement/solution. Negotiation can involve a third party practitioner, but they have no determinative role on the outcome.

Mediation – Parties, with the assistance of a third party, identify issues and attempt to negotiate an agreement/solution. The Mediator cannot impose a determination but does determine how the process will be conducted. The Mediator does not evaluate the strengths or weaknesses of the evidence presented.

Advisory Processes

An advisory process involves a third party practitioner considering the dispute in issue. The practitioner then advises the parties on the facts and the law and they will sometimes give an opinion as to the potential outcomes of the dispute. Advisory processes include:

Conciliation – A mediator will advise the parties on matters in dispute and propose potential solutions for resolution, but will not make a determination.

Dispute counselling – A dispute counsellor investigates the issues in dispute and gives the parties advice on issues which should be considered and how desirable outcomes may be achieved.

Neutral evaluation – An evaluator, chosen due to their expert knowledge, investigates the issues in dispute and provides a non-binding opinion of the likely outcome if the matter were to go to trial.